Relationship between Cash Conversion Cycle and Firm Profitability: Contract and Construction Companies Listed on BSESME

Abstract

Cash conversion cycle is useful is understanding the efficiency of converting firm’s inventory into sales and same converting in to cash. Present study has objective to find out the relationship between cash conversion cycle and firm profitability of contract and construction companies listed on BSESME. CCC comprises of Inventory Turnover Period, Debtors Turnover Period and Creditors Turnover period are independent variables. Return on Assets and Return on Equity are dependent variables. Finding shows significant negative relationship between cash conversion cycle and Profitability of the firms. There should be a constant watch on working capital Management.